What changed in this filing

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Item 1A. Risk Factors

2025-07-02 compared with 2024-06-24 · 136 added, 103 removed, 834 unchanged (22% of the section changed)

10 unchanged sentences

The loss of, or a significant reduction in sales to, one or more of our major customers could negatively impact our revenue and operating results.

In fiscal 2024, we had two customers that each accounted for 10% or more of our total revenue.

These customers accounted for 39% and 15% of our total revenue in fiscal 2024, respectively.

In fiscal 2025, we had one customer that accounted for 10% or more of our total revenue (such one customer accounting for 67% of total fiscal 2025 revenue).

In addition, in fiscal 2025, sales to our top 10 customers accounted for approximately 90% of our total revenue.

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In the future, these customers may decide not to purchase our products or solutions at all, may purchase fewer products or solutions than they did in the past or may alter their purchasing patterns.

For example, in February 2023, we announced that our largest customer reduced its demand forecast for certain of our products for reasons we understand are unrelated to our performance, which negatively impacted our fiscal 2023 fourth quarter revenue and our fiscal 2024 revenue expectations.

For example, in February 2023, we announced that our largest customer at the time reduced its demand forecast for certain of our products for reasons we understand were unrelated to our performance, which negatively impacted our fiscal 2023 fourth quarter revenue and our fiscal 2024 revenue expectations.

Further, the amount of revenue attributable to any single customer or our general customer concentration, may fluctuate in any given period.

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We face macroeconomic risks, including, but not limited to, recessions, inflation, stagflation and other economic conditions.

Customer demand for our products may be impacted by weak economic conditions, inflation, stagflation, recessionary or lower-growth environments, rising interest rates, equity market volatility, geopolitical tensions, war, trade restrictions and sanctions or other negative economic factors in the U.S.

Customer demand for our products may be impacted by weak economic conditions, inflation, stagflation, recessionary or lower-growth environments, rising interest rates, equity market volatility, geopolitical tensions, war, trade restrictions, tariffs and sanctions or other negative economic factors in the U.S.

or other nations.

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Thus, if general macroeconomic conditions, conditions in the semiconductor industry, or conditions in our customer end markets deteriorate or experience a sustained period of weakness or slower growth, our business and financial results could be materially and adversely affected.

Recently, the president of the United States has imposed new tariffs and substantially increased other tariffs on a variety of products and countries that could materially affect macroeconomic conditions.

In particular, in April 2025 the United States announced an across-the-board 10% tariff on all countries and individualized higher tariffs on certain countries, including China.

If an environment of significantly increased U.S.

tariffs and trade restrictions, together with reciprocal or retaliatory tariffs from other countries, continues or further escalates in a “trade war,” the global economy could be adversely affected, including through higher costs, higher interest rates or lower demand for our products, any of which could materially affect our business, financial condition, results of operations and prospects.

In addition, we are also subject to risk from inflation and increasing market prices of certain components, supplies and commodity raw materials, which are incorporated into our end products or used by our manufacturing partners or suppliers to manufacture our end products.

These components, supplies, and commodities have from time to time become restricted and general market factors and conditions (such as inflation or supply chain constraints) have in the past and may in the future affect the pricing of such components, supplies and commodities.

We have incurred net losses and have an accumulated deficit, and we may incur additional net losses in the future.

We have a history of net losses and experienced net losses of $28.4 million and $16.5 million for fiscal 2024 and 2023, respectively, primarily attributable to increased operating expenses, such as investments in research and development, including share-based compensation.

As of April 27, 2024, we had an accumulated deficit of $135.3 million.

Changes in global trade policies could have a material adverse effect on our business.

Recently, the President of the United States has increased tariffs on a variety of products and countries that could materially affect our business.

In particular, in April 2025 the United States announced an across-the-board 10% tariff on all countries and individualized higher tariffs on certain countries, including China.

A great deal of uncertainty surrounds the state of tariffs and other trade measures worldwide.

While the current U.S.

administration has been actively focused on trade, the exact implementation, amount, scope and nature of these tariffs remains unclear.

It also remains unclear how other countries will respond to the United States’ trade proposals and actions.

As of now, high reciprocal tariffs are in effect between China and the United States and the United States has announced, but temporarily paused the effective date of, tariffs on goods imported from many other countries, including Mexico, Canada, Taiwan and the European Union.

Significant trade partners such as Mexico, Canada and the European Union have announced retaliatory tariffs.

Further, while the United States has exempted certain technology products such as semiconductors and electronics from the reciprocal tariffs announced on April 2, 2025 such that our products are not subject to the announced tariffs, it has also initiated Section 232 investigations on such products, possibly leading to the imposition of specific tariffs on these products or on products that incorporate them.

Although we continue to evaluate the impact of these tariffs on our business, these tariffs may result in significantly higher costs to acquire the materials and components used in our products.

These tariffs and other trade restrictions could also limit the availability of components and raw materials.

Given this dynamic and rapidly evolving environment, it is not possible to know with any degree of certainty what the negative direct and indirect consequences of tariffs could be on our business and financial results.

We have incurred net losses in prior periods and have an accumulated deficit, and we may incur additional net losses in the future.

Prior to fiscal 2025, we had a history of net losses.

While we generated net income of $52.2 million in fiscal 2025, we incurred net losses of $28.4 million in fiscal 2024 primarily attributable to increased operating expenses, such as investments in research and development, including share-based compensation.

As of May 3, 2025, we had an accumulated deficit of $83.2 million.

We cannot assure you that we will generate sufficient revenue to offset the cost of growing our business in the future.

Our revenue or revenue growth rate may decline in the future because of a variety of factors, including increased competition, reduced demand for our products and the maturation of our

Our revenue or revenue growth rate may decline in the future because of a variety of factors, including increased competition, reduced demand for our products and the maturation of our business.

You should not consider our historical revenue growth or operating expenses as indicative of our future performance.

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Currently, our competitors range from large, international companies offering a wide range of semiconductor products to smaller companies specializing in narrow markets.

Our principal competitors with respect to our products include Broadcom and Marvell as well as various DAC suppliers.

Our principal competitors with respect to IP licensing include Synopsys and Alphawave.

We expect competition will increase as our market grows, connectivity technology advances and existing competitors

improve or expand their product offerings.

Our principal competitors with respect to our products include Broadcom Ltd.

(Broadcom), Marvell Technology, Inc.

(Marvell) and Astera Labs, Inc.

(Astera), as well as various cable suppliers.

We expect competition will increase as our market grows, connectivity technology advances and existing competitors improve or expand their product offerings.

In addition, new companies could enter our market, creating additional competition in the future.

Our ability to compete successfully depends, in part, on factors that are outside of our control, including industry and general economic trends.

Many of our competitors are substantially larger, have greater financial, technical, marketing, distribution, customer support, government support and other resources, are more established than we are and have significantly better brand recognition and broader product offerings, and may be able to bundle their products to gain market share.

Many of our competitors are substantially larger, have greater financial, technical, marketing, distribution, customer support, government support and other resources, are more established than we are and have better brand recognition and broader product offerings, and may be able to bundle their products to gain market share.

This may enable them to better withstand adverse economic or market conditions, such as those caused by uncertainty as a result of the recent macroeconomic environment, which has been characterized by rising interest rates and inflation, geopolitical instability, public health measures and supply chain uncertainty.

These factors cause companies across the semiconductor industry to reduce spending and tighten inventory controls, which could negatively impact our business, financial condition, and results of operations.

These factors cause companies across the semiconductor industry to reduce spending and tighten inventory controls, which

could negatively impact our business, financial condition and results of operations.

Our ability to compete successfully will depend on a number of factors, including:

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Industry consolidation may lead to increased competition.

Our competitors may also establish cooperative relationships among themselves or with third parties or may acquire companies that provide

similar products to ours.

Our competitors may also establish cooperative relationships among themselves or with third parties or may acquire companies that provide similar products to ours.

As a result, new competitors or alliances may emerge that could capture significant market share.

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We may incur substantial expenses to develop, market and qualify products that may not generate any revenue.

Our business is dependent on us winning competitive bid selection processes, known as “design wins.” We are focused on securing design wins that enable us to sell our products and solutions.

Our business can be dependent on us winning competitive bid selection processes, known as “design wins.” We are focused on securing design wins that enable us to sell our products and solutions.

We consider a design win to occur when a customer notifies us that it has selected our products or technology to be incorporated into a product or system under development, often as part of a competitive technology review and bid process.

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Our customers may take several months or more than a year to evaluate our products and solutions.

For example, prior to purchasing our products, our customers require that both our products and our third-party contractors undergo extensive qualification processes, which involve testing of our products in the customers’ systems, as well as testing for reliability.

For example, prior to purchasing our products, our customers may require that both our products and our third-party contractors undergo extensive qualification processes, which involve testing of our products in the customers’ systems, as well as testing for reliability.

This qualification process may continue for several months or more.

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After our products are qualified, it can take several months or more before the customer commences volume production of components or systems that incorporate our products.

Despite these uncertainties, we devote substantial resources, including design, engineering,

sales, marketing and management efforts, to qualify our products with customers in anticipation of sales.

Despite these uncertainties, we devote substantial resources, including design, engineering, sales, marketing and management efforts, to qualify our products with customers in anticipation of sales.

If we are unsuccessful or delayed in qualifying any of our products with a customer, sales of those products to the customer may be precluded or delayed, which may impede our growth and materially and adversely affect our business, financial condition and results of operations.

The delays inherent in these lengthy sales cycles increase the risk that a customer will decide to cancel, curtail, reduce or delay its product plans or adopt a competing design from one of our competitors, which could cause us to lose anticipated revenue if we continue development but are unable to secure a new design win.

The delays inherent in a lengthy sales cycle increases the risk that a customer will decide to cancel, curtail, reduce or delay its product plans or adopt a competing design from one of our competitors, which could cause us to lose anticipated revenue if we continue development but are unable to secure a new design win.

Any delay or cancellation of a customer’s plans could materially and adversely affect our financial results, as we may have incurred significant expense without generating any revenue.

Moreover, our customers’ failure to successfully market and sell their products could reduce demand for our products and materially and adversely affect our business, financial condition and results of operations.

Because of our extended sales cycle, our revenue in future years is highly dependent on design wins we are awarded in prior years.

Because of an extended sales cycle, our revenue in future years is highly dependent on design wins we are awarded in prior years.

It is typical that a design win will not result in meaningful revenue until one or more years later, if at all.

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We currently outsource all of our IC manufacturing to TSMC, with the assembly and testing processes outsourced to other subcontractors primarily in Asia.

We also use third-party contract manufacturers for a significant majority of our assembly and test operations, including Amkor, ASE, KYEC, and TeraPower for our IC products, and BizLink and Foxlink for our AEC products.

We also use third-party contract manufacturers for a significant majority of our assembly and test operations, including Amkor, ASE, KYEC and TeraPower for our IC products, and BizLink for our AEC products.

The failure to manage our relationships with our third-party contractors successfully could adversely affect our ability to market and sell our products and our reputation.

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In other cases, customer products are delayed due to incompatible deliverables from other vendors.

We incur significant design and development costs

in connection with designing our products for customers’ products that may not ultimately achieve market acceptance.

We incur significant design and development costs in connection with designing our products for customers’ products that may not ultimately achieve market acceptance.

If our customers discover design flaws, defects, errors or bugs in their products, or if they experience changing market requirements, failed evaluations or field trials or incompatible deliverables from other vendors, they may delay, change or cancel a project, and we may have incurred significant additional development costs and may not be able to recoup our costs, which in turn would adversely affect our business, financial condition and results of operations.

The complexity of our products could result in undetected defects;

we may be subject to warranty claims and product liability, which could result in a decrease in customers and revenue, unexpected expenses and loss of market share, and our product liability insurance may not adequately cover our costs arising from product defects or otherwise.

we may be subject to warranty claims and product liability, which could result in a decrease in customers and revenue,

unexpected expenses and loss of market share, and our product liability insurance may not adequately cover our costs arising from product defects or otherwise.

Highly complex products such as ours may contain defects, errors and bugs when they are first introduced or as new versions are released.

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Although we carry product liability insurance, we cannot be sure that we have obtained a sufficient amount of insurance coverage, that asserted claims will be within the scope of coverage of the insurance or that we will have sufficient resources to satisfy any asserted claims arising from defects in our products or otherwise.

We may not accurately anticipate market trends and changing industry standards, and if we fail to develop and introduce products to adequately address these trends or prevailing industry

standards on a timely basis, our ability to attract and retain customers could be impaired and our competitive position could be harmed.

We may not accurately anticipate market trends and changing industry standards, and if we fail to develop and introduce products to adequately address these trends or prevailing industry standards on a timely basis, our ability to attract and retain customers could be impaired and our competitive position could be harmed.

We operate in industries characterized by rapidly changing technologies and industry standards as well as technological obsolescence.

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If we are not able to repeatedly introduce, in successive years, new products that ship in volume, our revenue will likely not grow and may decline significantly and rapidly.

To compete successfully, we must design, develop, market and sell new or enhanced products that provide increasingly higher levels of performance and reliability while meeting industry standards and the cost expectations of our customers.

cost expectations of our customers.

The introduction of new products by our competitors, the delay or cancellation of a system or platform for which any of our products are designed, the market acceptance of products based on new or alternative technologies or the emergence of new industry standards could render our existing or future products uncompetitive from a pricing standpoint, obsolete or otherwise unmarketable.

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We generally do not maintain long-term supply contracts with TSMC or other third-party manufacturers or suppliers, and any disruption in our supply of products or materials, including raw material price fluctuations could have a material adverse effect on our business, financial condition and results of operations.

Except for our agreements with BizLink and Foxlink for the manufacture of certain AEC products, we do not maintain long-term supply contracts with TSMC or generally with any of our third-party contract manufacturers or other suppliers.

Except for our agreement with BizLink for the manufacture of certain AEC products, we do not maintain long-term supply contracts with TSMC or generally with any of our third-party contract manufacturers or other suppliers.

We make substantially all of our purchases on a purchase order basis.

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Such a transition would likely result in increased production costs and require a qualification process by our customers or their end customers.

None of TSMC, BizLink, Foxlink, or our third-party manufacturers or other suppliers have provided contractual assurances to us that adequate capacity will be available to us to meet our anticipated future demand for our solutions.

None of TSMC, BizLink or our third-party manufacturers or other suppliers have provided contractual assurances to us that adequate capacity will be available to us to meet our anticipated future demand for our solutions.

We generally place orders for products with some of our suppliers several months prior to the anticipated delivery date, with order volumes based on our forecasts of demand from our customers.

inaccurately forecast demand for our products, we may be unable to obtain adequate and cost-effective foundry or assembly capacity from TSMC or our other third-party manufacturers or suppliers to meet our customers’ delivery requirements, or we may accumulate excess inventories.

If we inaccurately forecast demand for our products, we may be unable to obtain adequate and cost-effective foundry or assembly capacity from TSMC or our other third-party manufacturers or suppliers to meet our customers’ delivery requirements, or we may accumulate excess inventories.

Moreover, even if we accurately forecast demand for our products, we cannot be sure that TSMC or our other third-party manufacturers or suppliers will allocate sufficient capacity to satisfy our requirements.

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TSMC and our assembly and test vendors may allocate capacity to the production of other companies’ products while reducing deliveries to us on short notice.

In particular, other customers that are larger and better financed than us or that have long-term agreements with TSMC or our assembly and test vendors may cause TSMC or our assembly and test vendors to reallocate capacity to those customers, decreasing the capacity available to us.

customers, decreasing the capacity available to us.

If we enter into costly arrangements with suppliers that include nonrefundable deposits or loans in exchange for capacity commitments, commitments to purchase specified quantities over extended periods or investment in a foundry, our operating results could be harmed.

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If we need another foundry or assembly and test subcontractor because of increased demand, or if we are unable to obtain timely and adequate deliveries from our providers, we might not be able to cost effectively and quickly retain other vendors to satisfy our requirements.

Supply of raw materials may be negatively impacted by an unfavorable macroeconomic environment, including as a result of increased tensions between the United States and its trading partners, particularly the PRC.

Supply of raw materials may be negatively impacted by an unfavorable macroeconomic environment, including as a result of increased tensions and tariff measures between the United States and its trading partners, particularly the PRC.

In the event that we cannot timely obtain sufficient quantities of materials or at reasonable prices, the quality of the material deteriorates or we are not able to pass on higher materials or energy costs to our customers, our business, financial condition and results of operations could be adversely impacted.

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We seek to offset the anticipated reductions in our average selling prices by reducing the cost of our products through improvements in manufacturing yields and lower wafer, assembly and testing costs, developing new products, enhancing lower-cost products on a timely basis and increasing unit sales.

Because we do not operate our own manufacturing or assembly facilities or most of our testing facilities, we may not be able to reduce our costs as rapidly as companies that operate their own facilities, and our costs may even increase, which could further reduce our gross margins.

Because we do not operate our own manufacturing or assembly facilities or most of our testing facilities,

we may not be able to reduce our costs as rapidly as companies that operate their own facilities, and our costs may even increase, which could further reduce our gross margins.

We rely primarily on obtaining yield improvements and volume-based cost reductions to drive cost reductions in the manufacture of existing products, introducing new products that incorporate advanced features and optimize die size and other price and performance factors that enable us to increase revenue while maintaining gross margins.

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If those customer orders do not materialize in a timely manner, we may have excess or obsolete inventory which we would have to reserve or write-down, and our gross margins would be adversely affected.

The COVID-19 pandemic or other contagious diseases may adversely impact our manufacturing, research and development, operations, sales and financial results.

Our business has been, and may continue to be, adversely impacted by the effects of the COVID-19 pandemic or other future pandemics.

In addition to global and domestic macroeconomic effects, during fiscal 2022 and 2023, the COVID-19 pandemic and related adverse public health measures caused disruption to our global operations and sales.

Our third-party manufacturing partners, suppliers, distributors, subcontractors and customers have been, and may continue to be, disrupted by worker absenteeism, quarantines and restrictions on their employees’ ability to work;

office and factory closures;

disruptions to ports and other shipping infrastructure;

border closures;

and other travel or health-related restrictions.

Depending on the magnitude of such effects on our manufacturing, assembling, testing, and packaging activities or the operations of our manufacturing partners, suppliers, distributors, sub-

contractors and customers, our supply chain, manufacturing and product shipments will be delayed, which could adversely affect our business, operations and customer relationships.

Although the COVID-19 pandemic related restrictions above have eased in most places, any resurgences or appearances of new variants of COVID-19 or emergence of other contagious diseases in various regions may result in the reinstitution of similar restrictions.

We expect lingering impacts related to COVID-19 to continue for the foreseeable future.

For example, we were impacted by COVID-19 outbreaks in Asia during the first half of fiscal 2023 that resulted in closed factories, clogged ports and a shortage of workers as officials imposed lockdowns and mass testing requirements.

In addition to operational and customer impacts, the COVID-19 pandemic has had, and is expected to continue to have (and future pandemics are expected to have), a significant impact on the economies and financial markets of many countries including an economic downturn, which has affected and may in the future affect demand for our products and impact our operating results in both the near and long term.

There can be no assurance that any decreases in sales resulting from the COVID-19 pandemic (or any future pandemic) will be offset by increased sales in subsequent periods.

Our ongoing efforts to manage these and other potential impacts of the COVID-19 pandemic (and any impacts of future pandemics) may be unsuccessful.

As the COVID-19 pandemic reaches endemic stages, due to the continued uncertainty regarding its severity and duration (including resurgences or mutations of the virus), related public health measures and macroeconomic impacts, at this time we are unable to predict its full impact on our business, cash flows, financial condition, and results of operation.

We may not receive timely payments from our customers, which could adversely affect our business, financial condition and results of operations.

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We regularly review the collectability and creditworthiness of our customers to determine an appropriate allowance for credit losses.

Based on our review of our customers, we had no reserve for credit losses as of April 27, 2024 and April 29, 2023.

Based on our review of our customers, we had no reserve for credit losses as of May 3, 2025 and April 27, 2024.

If our credit losses were to exceed our current or future allowance for credit losses, our business, financial condition and results of operations would be adversely affected.

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Our current systems, procedures and controls may not be adequate to support our future operations.

In addition, in connection with operating as a public company, we incur additional

significant legal, accounting and other expenses that we did not incur as a private company.

In addition, in connection with operating as a public company, we incur additional significant legal, accounting and other expenses that we did not incur as a private company.

If our revenue does not increase to offset these increases in our expenses, we may not achieve or maintain profitability in future periods.

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In addition, complying with any cleanup or remediation obligations for which we are or become responsible could be costly and have a material adverse effect on our business, financial condition and results of operations.

Changing requirements relating to the materials composition of our semiconductor products, including the restrictions on lead and certain other substances in electronic products sold in various countries, including the United States, the PRC and Japan, and in the European Union, increase the complexity and costs of our product design and procurement operations and may require us to re-engineer our products.

including the United States, the PRC and Japan, and in the European Union, increase the complexity and costs of our product design and procurement operations and may require us to re-engineer our products.

Such re-engineering may result in excess inventory or other additional costs and could have a material adverse effect on our results of operations.

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Increasingly, regulators, customers, investors, employees and other stakeholders are focusing on sustainability matters.

While we have certain sustainability initiatives at the Company there can be no

assurance that regulators, customers, investors, and employees will determine that these programs are sufficiently robust.

While we have certain sustainability initiatives at the Company there can be no assurance that regulators, customers, investors and employees will determine that these programs are sufficiently robust.

In addition, there can be no assurance that we will be able to accomplish our announced goals related to our sustainability initiatives, as statements regarding our sustainability goals reflect our current plans and aspirations and are not guarantees that we will be able to achieve them within the timelines we announce or at all.

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Goodwill is generally characterized as an active asset to the extent it is associated with business activities that produce active income.

Based on the manner in which we currently conduct our business, our current and expected composition of our income and assets and the estimated value of our assets, we believe that we were not a PFIC for our taxable year ending on April 27, 2024.

However, our PFIC status for any year is based on an annual determination for such year, and there can be no assurance that we will not be a PFIC for our current taxable year or any future taxable year.

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The amount of income tax we pay is subject to ongoing audits by tax authorities.

If audits result in payments or assessments, our future results may include unfavorable adjustments to our tax liabilities, and we could be adversely affected.

If audits result in payments or assessments, our future results may include unfavorable adjustments to our tax liabilities, and we could

be adversely affected.

Any significant changes to the tax system in the jurisdictions where we operate could adversely affect our business, financial condition and results of operations.

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Our business depends on continued capital expenditures by data center service providers and is subject to the cyclicality of such expenditures.

If the demand for our customers’ products declines or fails to increase, as a result of lower capital expenditures by service providers or any other factors, demand for our products will be similarly affected.

If the demand for our customers’ products declines or fails to increase, as a result of lower capital expenditures by service providers or any other factors, demand for

our products will be similarly affected.

Global economic downturns have caused in the past, and may cause in the future, a significant reduction in capital spending on data infrastructure equipment, which could materially and adversely affect our business, financial condition and results of operations.

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• Uncertain Commercial Viability:

The development and adoption of generative AI technologies are still in their early stages, and their commercial viability is uncertain.

The development and adoption of generative AI technologies are still in their early stages, and their commercial viability remains uncertain.

There is a risk that the demand for connectivity solutions for such technologies may not meet our expectations or that market acceptance may be slower than anticipated.

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Generative AI technologies, and the perceived risks in the use and development of generative AI technologies, is emerging as a source of significant media attention and societal and political debate.

The regulatory landscape surrounding generative AI technologies is evolving, and there is currently significant uncertainty as to whether governmental authorities, self-regulatory institutions or other regulatory authorities will take additional action to curtail the development or use of generative AI technologies.

Moreover, laws, regulations or industry standards that develop in response to generative AI technologies may be burdensome or may prohibit the deployment of generative AI technologies for one or more uses, any of which could result in lower than anticipated demand from hyperscalers for connectivity solutions in the AI/ML infrastructure market.

The regulatory landscape surrounding generative AI technologies is evolving, and there is ongoing uncertainty regarding the extent of actions taken by governmental authorities, self-regulatory institutions or other regulatory authorities to curtail the development or use of generative AI technologies.

For example, most recently the European

Union approved the EU Artificial Intelligence Act (the EU AI Act), which establishes a comprehensive, risk-based governance framework for artificial intelligence in the EU market and went into effect on August 2, 2024.

Moreover, laws, regulations or industry standards that develop in response to generative AI technologies,like the EU AI Act, may be burdensome or may prohibit the deployment of generative AI technologies for one or more uses, any of which could result in lower than anticipated demand from hyperscalers for connectivity solutions in the AI/ML infrastructure market.

• Ethical Considerations and Public Perception:

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Legal and regulatory requirements, as well as investor expectations, on corporate social responsibility practices and disclosure, are subject to change, can be unpredictable, and may be difficult and expensive for us to comply with, given the complexity of our supply chain and our significant outsourced manufacturing.

If we are unable to comply, or are unable to cause our suppliers to comply, with such policies or provisions or meet the requirements of our customers and our investors, it could harm our reputation, such customers may stop purchasing products from us, which would harm our revenue and results of operations, or such investors may sell their shares, which could cause the trading price of our ordinary shares to decline.

In addition, as part of their corporate social and environmental responsibility programs, as well as the Dodd-Frank Wall Street Reform and Consumer Protection Act, which imposes disclosure requirements regarding the use in components of products of “conflict minerals” mined from the Democratic Republic of Congo and adjoining countries, whether the components of such products are manufactured by them or third parties, an increasing number of OEMs are seeking to source products that do not contain minerals sourced from areas where proceeds from the sale of such minerals are likely to be used to fund armed

conflicts, such as in the Democratic Republic of Congo.

which would harm our revenue and results of operations, or such investors may sell their shares, which could cause the trading price of our ordinary shares to decline.

This could adversely affect the sourcing, availability and pricing of minerals used in the manufacture of semiconductor devices, including our products.

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Accordingly, our business and operating results are impacted by worldwide economic conditions.

Uncertainty about current global economic conditions, which has been characterized by rising interest rates and inflation, geopolitical instability, continuing risk from the COVID-19 pandemic and public health measures related to it, and supply chain uncertainty, has caused, and may continue to cause, businesses to postpone or reduce spending.

Uncertainty about current global economic conditions, which has been characterized by rising interest rates and inflation, tariffs, geopolitical instability, public health crises, such as the COVID-19 pandemic and supply chain uncertainty, has caused, and may continue to cause, businesses to postpone or reduce spending.

This in turn could have a material adverse effect on our supply chain or the demand for our products or the systems into which our products are incorporated.

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• restrictions, including economic sanctions, imposed by the U.S.

government or foreign governments on our ability to do business with certain companies or in certain countries as a result of international political conflicts, war, climate change or the COVID-19 pandemic, and the complexity of complying with those restrictions;

government or foreign governments on our ability to do business with certain companies or in certain countries as a

result of international political conflicts, war, climate change or public health epidemics, and the complexity of complying with those restrictions;

• transportation delays and other consequences of limited local infrastructure, and disruptions, such as large scale outages or interruptions of service from utilities or telecommunications providers;

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• difficulty funding and providing liquidity to our international operations, particularly in light of stringent PRC regulations;

• difficulty securing payment obligations from our PRC subsidiaries in the event we rely on our subsidiaries to fund financing requirements;

• difficulty securing the ability of our PRC subsidiaries to pay dividends or make other distributions to us in the event we rely on our subsidiaries to fund financing requirements, considering restrictions under PRC regulations;

• difficulty in obtaining distribution and support.

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laws could also directly conflict with PRC laws, forcing businesses to choose between compliance with conflicting legal regimes.

For example, in January 2021, the Ministry of Commerce of the People’s Republic of China (MOFCOM) issued MOFCOM Order No.

For example, in January 2021, the Ministry of

Commerce of the People’s Republic of China (MOFCOM) issued MOFCOM Order No.

1 of 2021 on Rules Counteracting Unjustified Extraterritorial Application of Foreign Legislation and Other Measures (Order No.

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We may also be adversely affected through penalties, reputational harm, loss of access to certain markets or otherwise.

In addition, various countries regulate the import and export of certain encryption and other technology, including import and export permitting and licensing requirements, and have enacted laws that could limit our ability to distribute our products and solutions or could limit our users’ ability to access our products and solutions in those countries.

our products and solutions in those countries.

Changes in our products and solutions, or future changes in Trade Controls regulations of the United States or other countries, may prevent our users with international operations from utilizing our products and solutions globally or, in some cases, prevent the export or import of our products and solutions to certain countries, governments or persons altogether.

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In September 2020, the PRC government issued the Regulations on Unreliable Entity List, setting out principles for administration of the Unreliable Entity List framework.

Any future change in export or import regulations, economic sanctions or related legislation, or change in the countries, governments, persons or technologies targeted by such regulations, could

result in decreased use of our products and solutions by, or in our decreased ability to export or sell products and solutions to, existing or potential customers with international operations.

Any future change in export or import regulations, economic sanctions or related legislation, or change in the countries, governments, persons or technologies targeted by such regulations, could result in decreased use of our products and solutions by, or in our decreased ability to export or sell products and solutions to, existing or potential customers with international operations.

Any decreased use of our products or solutions or limitation on our ability to export or sell our products and solutions would likely adversely affect our business, financial condition and results of operations.

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Also, it is possible that we may be required to pay substantial damages, penalties or settlement costs which could have a material adverse effect on our business, financial condition and results of operations.

Our business is affected by new U.S.

government regulations restricting outbound investments in China.

On November 15, 2024, the Office of Investment Security of the U.S.

Department of the Treasury published in the Federal Register a final rule to implement President Biden’s August 2023 Executive Order on Addressing United States Investments in Certain National Security Technologies and Products in Countries of Concern (the EO).

The EO provided for the establishment of a new and targeted national security regulatory framework directed at controlling outbound investment from the United States in certain sensitive industry sectors in the People’s Republic of China (PRC) and the Special Administrative Regions of Hong Kong and Macau (collectively, China).

This final rule (the Outbound Investment Rule) went into effect January 2, 2025.

As implemented by the Outbound Investment Rule, the new framework imposes notification requirements and prohibitions on specified investments by U.S.

persons in the semiconductor and microelectronics sector, quantum information technologies, and artificial intelligence (AI) systems.

Within the semiconductor and microelectronics sector, prohibited investments include certain covered investments in electronic design automation software;

certain fabrication and advanced packaging tools;

the design, fabrication, or packaging of certain advanced integrated circuits, and supercomputers.

Notifiable investments include any covered investments related to the design, fabrication, or packaging of integrated circuits not otherwise covered by the prohibition.

The Outbound Investment Rule captures entities that are not based in China or Chinese-owned if certain financial thresholds are met.

Certain of our subsidiaries that are organized and conduct substantial operations in China engage in certain covered activities under the Outbound Investment Rule.

Given the breadth of the notification requirement as applicable within the semiconductor industry, we will likely be subject to increased regulatory burden to engage in certain investments in China.

Such a mechanism could negatively impact our ability to realize value from certain existing and future investments, including by limiting our capital expenditures in our Chinese subsidiaries.

Moreover, the Outbound Investment Rule ostensibly applies to “indirect” investments by U.S.

persons in entities that are persons of a country of concern, which currently inhibits our ability to raise capital through equity financings with U.S.

investors as our Chinese subsidiaries meet the applicable financial thresholds to be a covered foreign person.

Accordingly, the outbound investment reporting requirements and prohibitions could adversely affect our business, financial condition, and operating results.

We face significant economic and political risks associated with doing business in Taiwan, particularly due to the geopolitical tension between Taiwan and mainland China, that could negatively affect our business and the trading price of our ordinary shares.

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Past developments related to the interactions between mainland China and Taiwan, especially in relation to trade activities such as bans on exports of goods from time to time, have on occasion depressed the transactions and business operations of certain Taiwanese companies and Taiwan’s overall economic environment.

We cannot predict whether there will be escalation of the tensions between mainland China and Taiwan, which would lead to new bans or tariffs on exports or even conflict.

We cannot predict whether there will be escalation of the tensions between mainland China and Taiwan, which may lead to new bans or tariffs on exports or even conflict.

A substantial amount of our revenue is derived from products manufactured in Taiwan and as a result, disruptions to business in Taiwan could also adversely impact our business and results of operations.

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Accordingly, political and economic conditions in Hong Kong and the surrounding region may directly affect our business.

Since early 2019, a number of political protests and conflicts have occurred in Hong Kong in connection with proposed legislation that would allow local authorities to detain and extradite people who are wanted in territories that Hong Kong does not have extradition agreements with, including mainland China and Taiwan.

Such protests have negatively impacted the economy of Hong Kong, including the retail market, property market, stock market, and tourism.

On May 28, 2020, the National People’s Congress of the People’s Republic of China approved a proposal to impose a new national security law for Hong Kong and authorized the Standing Committee of the National People’s Congress to proceed to work out details of the legislation to be implemented in Hong Kong.

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On the same day, the U.S.

President also issued Executive

Order 13936 pursuant to which existing license exceptions and preferential status for Hong Kong under relevant U.S.

President also issued Executive Order 13936 pursuant to which existing license exceptions and preferential status for Hong Kong under relevant U.S.

export control laws and regulations were revoked.

The combined effect of the Hong Kong National Security Law, the Hong Kong Autonomy Act and Executive Order 13936 have caused, and may continue to cause, substantial market uncertainties for businesses operating in Hong Kong.

It is difficult to predict the full impact of the Hong Kong National Security Law and the resulting sanctions and other measures by the U.S.

and foreign governments against Hong Kong.

We cannot rule out the possibility of additional sanctions or other forms of penalties by the U.S.

and foreign governments against Hong Kong, which may impact our ability to business in Hong Kong.

Hong Kong is a special administrative region of the PRC and the basic policies of the PRC regarding Hong Kong are reflected in the Basic Law (i.e., Hong Kong’s constitutional document) which provides Hong Kong with a high degree of autonomy and ensures its executive and legislative systems and independent judicial powers under the principle of “one country, two systems”.

However, there is no assurance that there will not be any changes in the political arrangement between the PRC and Hong Kong, thereby affecting the economic, political and legal

environment in Hong Kong in the future.

We cannot rule out the possibility of such change, which may impact our ability to conduct business in Hong Kong.

We could be adversely affected by violations of applicable anti-corruption laws or violations of our internal policies designed to ensure ethical business practices.

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Failure to complete the SAFE registrations may subject our PRC subsidiaries or our executive officers and other employees to fines and legal sanctions.

We may not at all times be fully informed of the identities of all the PRC residents holding direct or indirect interests in our company, and we cannot assure you that all of our shareholders or beneficial owners who are PRC residents or entities, or all of our executive officers and other employees who are PRC citizens or residents and who have been or will be granted incentive shares or options, have

complied with, and will in the future make or obtain any applicable registrations or approvals required by, SAFE regulations.

Failure or inability by our shareholders or beneficial owners who are PRC residents or by our executive officers and other employees who are PRC citizens or residents and who have been or will be granted incentive shares or options to comply with SAFE regulations, failure by us to conduct or amend the foreign exchange registrations of our PRC subsidiaries, or failure to disclose or a misrepresentation of the controller(s) or ultimate shareholders of the foreign invested enterprise that is established through round trip investment, could subject us to fines or legal sanctions, such as restrictions on our overseas or cross-border investment activities or our PRC subsidiaries’ ability to make distributions or pay dividends to us.

amend the foreign exchange registrations of our PRC subsidiaries, or failure to disclose or a misrepresentation of the controller(s) or ultimate shareholders of the foreign invested enterprise that is established through round trip investment, could subject us to fines or legal sanctions, such as restrictions on our overseas or cross-border investment activities or our PRC subsidiaries’ ability to make distributions or pay dividends to us.

As a result, our ability to contribute capital to fund our business operations in the PRC and our ability to receive distributions from our PRC subsidiaries could be materially and adversely affected.

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In addition, in the event that we recruit employees from other technology companies, including certain potential competitors, and these employees are involved in the development of products that are similar to the products they assisted in developing for their former employers, we may become subject to claims that such employees have improperly used or disclosed trade secrets or other proprietary information.

We may also in the future be subject to claims by our

suppliers, employees, consultants or contractors asserting an ownership right in our patents or patent applications, as a result of the work they performed on our behalf.

Claims that our products, processes or technology infringe, misappropriate or otherwise violate third-party intellectual property rights, regardless of their merit or resolution, could be time-consuming or costly to defend or settle and could divert the efforts and attention of our management and technical personnel.

We may also in the future be subject to claims by our suppliers, employees, consultants or contractors asserting an ownership right in our patents or patent applications, as a result of the work they performed on our behalf.

to defend or settle and could divert the efforts and attention of our management and technical personnel.

Infringement claims also could harm our relationships with our customers and might deter future customers from doing business with us.

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Because some of our counterparts are larger than we are and have greater resources than we do, they may be more likely to be the target of an infringement claim by third parties than we would be, which could increase our chances of becoming involved in a future lawsuit.

If any such claims were to succeed, we might be forced to pay damages on behalf of our customers or vendors that could increase our expenses, disrupt our ability to sell our solutions and reduce

If any such claims were to succeed, we might be forced to pay damages on behalf of our customers or vendors that could increase our expenses, disrupt our ability to sell our solutions and reduce our revenue.

Any dispute with a customer or vendor with respect to such obligations could have adverse effects on our relationship with such customer or vendor and other current and prospective customers or vendors and reduce demand for our solutions.

In addition to the time and expense required for us to supply support or indemnification to our customers, any such litigation could severely disrupt or shut down the business of our customers or vendors, which in turn could hurt our relations with them and cause the sale of our products to decrease.

sale of our products to decrease.

Any of the foregoing could harm our business, financial condition and results of operations.

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We also rely on trade secret laws, as well as confidentiality and non-disclosure and other contractual protections, to protect our proprietary know-how.

We cannot assure you that any patents from any pending or future patent applications will be issued, and even if our pending patent applications are granted, the scope of the rights granted to us may not be meaningful, may not provide us with a commercial advantage and may be subject to reinterpretation after issuance.

We cannot assure that any patents from any pending or future patent applications will be issued, and even if our pending patent applications are granted, the scope of the rights granted to us may not be meaningful, may not provide us with a commercial advantage and may be subject to reinterpretation after issuance.

The patent prosecution process is expensive, time-consuming and complex, and we may not be able to file, prosecute, maintain, enforce or license all necessary or desirable patent applications at a reasonable cost or in a timely manner.

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In addition, our competitors or others may design around our protected patents or other intellectual property rights.

Effective intellectual property protection may be unavailable or more limited in foreign jurisdictions relative to those protections available in the United States, or may not be applied for in one or

more relevant jurisdictions.

Even if foreign patents are granted, effective enforcement in foreign countries may not be available.

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We are unable to predict whether these license agreements can be obtained or renewed or the technology can be replaced on acceptable terms, or at all.

In that event, we may be required to expend significant time and resources to redesign our technology, products or the methods for manufacturing them or to develop

or license replacement technology, all of which may not be feasible on a technical or commercial basis.

Any disputes with our licensing partners with respect to such agreements could narrow what we believe to be the scope of our rights to the relevant intellectual property, increase our obligations under such agreements or restrict our ability to develop and market our current or new products and services.

In that event, we may be required to expend significant time and resources to redesign our technology, products or the methods for manufacturing them or to develop or license replacement technology, all of which may not be feasible on a technical or commercial basis.

agreements or restrict our ability to develop and market our current or new products and services.

Any of these events could negatively impact our business, financial condition and results of operations.

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Due to the evolving nature of these cybersecurity threats, we cannot predict the potential impact of any future incident.

While we take measures to protect the security of, and prevent unauthorized access to, our information technology systems and personal and proprietary information, the cybersecurity controls for our information technology systems, or those of our vendors, suppliers or customers, as well as other cybersecurity practices we follow, may not prevent unauthorized access to, damage to, disablement or encryption of, use or misuse of, disclosure of, modification of, destruction of or loss of our data or the data of others (including personal information and proprietary information).

cybersecurity practices we follow, may not prevent unauthorized access to, damage to, disablement or encryption of, use or misuse of, disclosure of, modification of, destruction of or loss of our data or the data of others (including personal information and proprietary information).

Any actual or perceived cybersecurity incident could harm our business and operating results and could result in, among other things, unfavorable publicity, governmental inquiry and oversight, difficulty in marketing our services, allegations by our customers that we have not performed our contractual obligations, litigation by affected parties including our customers and possible financial obligations for damages related to the theft or misuse of such information or inventory, any of which could negatively impact our business, financial condition and results of operations.

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Because the interpretation and application of many such laws and regulations, remain uncertain and continue to evolve, it is possible that these laws and regulations may be interpreted and applied in a manner that is inconsistent with our data management practices or the features of our products or solutions, and we could face fines, lawsuits, regulatory investigations and other claims and penalties, and we could be required to fundamentally change our products or our business practices, all of which could have a material adverse effect on our business.

Any inability, or perceived inability, to adequately address privacy and data protection concerns, or to comply with applicable laws, regulations, policies, industry standards, contractual obligations or other legal obligations, even if unfounded, could result in additional cost and liability to us, damage our reputation,

inhibit sales and have a material adverse effect on our business, results of operations, and financial condition.

We use certain software governed by open-source licenses, which under certain circumstances could materially adversely affect our business, financial condition, operating results and cash flow.

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Provisions in our amended and restated memorandum and articles of association may have the effect of discouraging lawsuits against our directors and officers.

Cayman Islands law does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against willful default, willful neglect, breach of fiduciary duty, unconscionable behavior or behavior which falls within the broad stable of conduct identifiable as ‘equitable’ fraud on the part of the director or officer in question.

director or officer in question.

Our amended and restated memorandum and articles of association provide for indemnification of our officers and directors to the maximum extent permitted by law, including for any liability incurred in their capacities as such, except through their own actual fraud, willful neglect or willful default.

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The market price of our ordinary shares could decline as a result of substantial sales of our ordinary shares, particularly sales by our directors, executive officers and significant shareholders, or the perception in the market that holders of a large number of shares intend to sell their shares.

As of April 27, 2024, we had outstanding a total of 164,305 thousand ordinary shares.

As of May 3, 2025, we had outstanding a total of 171.2 million ordinary shares.

All of these shares are freely tradable in the public market without restriction, except for any shares held by one of our existing “affiliates,” as that term is defined in Rule 144 under the Securities Act.

As of April 27, 2024, we also had outstanding a warrant to purchase up to 4,080 thousand of our ordinary shares and options and restricted stock units covering 16,560 thousand of our ordinary shares.

As of May 3, 2025, we also had outstanding a warrant to purchase up to 4.1 million of our ordinary shares and options and restricted stock units covering 13.0 million of our ordinary shares.

All of the ordinary shares that are issuable upon exercise of the outstanding options and restricted stock units have been registered for public resale under the Securities Act.

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The preparation of financial statements in conformity with generally accepted accounting principles in the United States, or GAAP, requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.

We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as described in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the results of which form the basis for making judgments about the carrying values of assets, liabilities, equity, revenue and expenses that are not readily apparent from other sources.

We base our estimates on historical experience and on various other assumptions that we believe to be reasonable

under the circumstances, as described in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the results of which form the basis for making judgments about the carrying values of assets, liabilities, equity, revenue and expenses that are not readily apparent from other sources.

Significant assumptions and estimates used in preparing our consolidated financial statements include those related to revenue recognition, inventory valuation, income taxes, impairment of long-lived assets, share-based compensation, operating leases and fair value of ordinary shares.

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Our executive officers, directors and their affiliates, if they choose to act together, have the ability to control or significantly influence all matters submitted to shareholders for approval.

As of April 27, 2024, our executive officers, directors and their affiliates, in the aggregate, beneficially owned approximately 17% of our outstanding ordinary shares.

As of May 3, 2025, our executive officers, directors and their affiliates, in the aggregate, beneficially owned approximately 12.5% of our outstanding ordinary shares.

As a result, such persons, acting together, will have the ability to control or significantly influence all matters submitted to our board of directors or shareholders for approval, including the appointment of our management, the election and removal of directors and approval of any significant transaction, as well as our management and business affairs.

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Many of the companies with which we compete for experienced personnel have greater resources than we have.

we hire employees from competitors or other companies, their former employers may attempt to assert that these employees or we have breached legal obligations, resulting in a diversion of our time and resources.

If we hire employees from competitors or other companies, their former employers may attempt to assert that these employees or we have breached legal obligations, resulting in a diversion of our time and resources.

In addition, job candidates and existing employees often consider the value of the equity awards they receive in connection with their employment.

If the perceived value of our equity awards declines, it may adversely affect our ability to recruit and retain highly skilled employees.

Further, changes in immigration policies may negatively impact our ability to attract and retain personnel, including personnel with specialized technical expertise.

Further, changes

in immigration policies may negatively impact our ability to attract and retain personnel, including personnel with specialized technical expertise.

If we fail to attract new personnel or fail to retain or motivate our current personnel, our business, financial condition and results of operations could be adversely affected.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors